EMPLOYMENT AGREEMENT
AGREEMENT made as of March 13, 1997 between 800-JR CIGAR, INC., a
Delaware corporation (the "Company"), and XXXXXXX X. XXXXXXX ("Executive").
WHEREAS, the Company wishes to employ Executive and Executive is
willing to accept such employment, all upon the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date on which the Company sells
shares of its common stock in an initial public offering (the "Employment Date")
and ending as provided in paragraph 4 hereof (the "Employment Period").
2. Positions and Duties.
(a) During the Employment Period, Executive shall serve as the
Executive Vice President and Secretary of the Company and, subject to the
control of the Board of Directors, shall have all powers and perform all duties
incident to the offices of Executive Vice President and Secretary.
(b) Executive shall report to the President of the Company, and
Executive shall devote her best efforts and her full business time and attention
to the business and affairs of the Company and its Subsidiaries (as defined),
except for permitted vacation periods and reasonable periods of illness or other
incapacity and except for such time and effort as she shall devote in the
performance of her duties as an officer and director of Casa Xxxxxx, Inc.,
provided, however, such duties shall not interfere with her duties and
responsibilities relating to the business and operations of the Company.
Executive shall perform her duties and responsibilities to the best of her
abilities in a diligent, trustworthy, businesslike and efficient manner.
(c) For purposes of this Agreement, "Subsidiary" shall mean any
corporation of which the securities having a majority of the voting power in
electing directors are, at the time of determination, owned by the Company,
directly or through one or more Subsidiaries.
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base salary shall be
$200,000 per annum or such higher rate as the Board, in its sole discretion, may
designate from time to time (the "Base Salary"), which salary shall be payable
in regular installments in accordance with the Company's general payroll
practices. In addition, during the Employment Period, Executive shall be
entitled to participate in all of the Company's employee benefit programs,
including insurance and pension plans, for which senior executive employees of
the Company and its Subsidiaries are generally eligible, and Executive shall be
entitled to four (4) weeks of paid vacation each year.
(b) The Company shall reimburse Executive for all reasonable
expenses incurred by Executive in the course of performing Executive's duties
under this Agreement which are consistent with the Company's policies in effect
from time to time with respect to travel, entertainment and other business
expenses, subject to the Company's requirements with respect to reporting and
documentation of such expenses.
(c) During the Employment Period, Executive shall be entitled to
receive such bonus or bonuses, if any, as determined by the Board in its
discretion.
4. Term.
(a) Unless renewed by the mutual agreement of the Company and
Executive, the Employment Period shall end on the third anniversary of the
Employment Date; provided that the Employment Period (i) shall terminate prior
to such date upon Executive's death, and (ii) may be terminated at any time by
the Company upon written notice of termination given by the Company to Executive
(a) if Executive shall be unable to perform his duties hereunder for at least 90
consecutive days or any 110 non-consecutive days in any 180-day period by reason
of Executive's mental or physical disability or incapacity or (b) for Cause (as
defined below).
(b) If the Employment Period is terminated due to Executive's death
or by the Company due to Executive's mental or physical disability or incapacity
prior to the third anniversary of the Employment Date, Executive's estate or
Executive, as the case may be, shall be entitled to receive Executive's Base
Salary (as in effect on the date of such termination) payable on the Company's
regular payroll dates for a period equal to the lesser of (i) the remainder of
the then remaining Employment Period and (ii) one year after such termination,
so long as Executive has not breached the provisions of paragraphs 5 and 6
hereof.
(c) If the Employment Period is terminated by the Company for Cause,
Executive shall only be entitled to receive her Base Salary through the date of
termination.
(d) All of Executive's rights to fringe benefits and bonuses
hereunder (if any) accruing after the termination of the Employment Period shall
cease upon such termination.
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(e) For purposes of this Agreement, "Cause" shall mean (i) the
commission of a felony or a crime involving moral turpitude or the commission of
any other act involving dishonesty, disloyalty or fraud with respect to the
Company or any of its Subsidiaries, (ii) conduct tending to bring the Company or
any of its Subsidiaries into substantial public disgrace or disrepute, (iii)
substantial and repeated failure to perform duties as reasonably directed by the
Board, (iv) gross negligence or willful misconduct with respect to the Company
or any of its Subsidiaries or (v) any other material breach of this Agreement
which is not cured within 15 days after written notice thereof by the Board of
Directors to Executive.
5. Confidential Information. Executive acknowledges that the
information, observations and data obtained by Executive while employed by the
Company concerning the business or affairs of the Company or any Subsidiary
("Confidential Information") are the property of the Company or such Subsidiary.
Therefore, Executive agrees that Executive shall not disclose to any
unauthorized person or use for Executive's own account any Confidential
Information without the prior written consent of the Board, unless and to the
extent that the aforementioned matters become generally known to and available
for use by the public other than as a result of Executive's acts or omissions to
act. Executive shall deliver to the Company at the termination of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes and software and other documents and
data (and copies thereof) relating to the Confidential Information or the
business of the Company or any Subsidiary which Executive may then possess or
have under Executive's control.
6. Non-Compete, Non-Solicitation.
(a) Executive acknowledges that in the course of Executive's
employment with the Company Executive will become familiar with the Company's
trade secrets and with other confidential information concerning the Company and
its predecessors and that Executive's services have been and will be of special,
unique and extraordinary value to the Company. Therefore, Executive agrees that,
during the Employment Period and for two years thereafter (the "Noncompete
Period"), Executive shall not directly or indirectly own, manage, control,
participate in, consult with, render services for, or in any manner engage in
any business competing with the businesses of the Company or its Subsidiaries as
such businesses exist or are in process on the date of the termination of
Executive's employment, within any geographical area in which the Company or its
Subsidiaries engage or plan to engage in such businesses. Nothing herein shall
prohibit Executive from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly traded, so
long as Executive has no active participation in the business of such
corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof or (ii) induce or attempt to induce any
customer, supplier, licensee or other business relation of the Company or any
Subsidiary to cease doing business with the Company or such Subsidiary, or in
any way
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interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary.
(c) If, at the time of enforcement of this paragraph 6, a court
shall hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.
(d) In the event of the breach or a threatened breach by Executive
of any of the provisions of this paragraph 6, the Company, in addition and
supplementary to other rights and remedies existing in its favor, may apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof (without posting a bond or other security).
7. Executive Representations. Executive hereby represents and
warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive does not and will not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which Executive is bound, (ii)
Executive is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity and (iii)
upon the execution and delivery of this Agreement by the Company, this Agreement
shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms.
8. Survival. Paragraphs 5 and 6 shall survive and continue in full
force in accordance with their terms notwithstanding any termination of the
Employment Period.
9. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed by first class mail,
return receipt requested, to the recipient at the address below indicated:
Notices to Executive:
XxXxxxx X. Xxxxxxx
00 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Notices to the Company:
800-JR Cigar, Inc.
000 Xxxxx 00 Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Secretary
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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
10. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. Complete Agreement. This Agreement embodies the complete
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
12. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
13. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
her rights or delegate her obligations hereunder without the prior written
consent of the Company.
14. Choice of Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New Jersey, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of New Jersey.
15. Amendment and Waiver. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
800-JR CIGAR, INC.
By /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
/s/ XxXxxxx X. Xxxxxxx
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XxXxxxx X. Xxxxxxx
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